LADYSMITH – Western Forest Products Inc. (WFP) posted a net loss of $19.6 million in the third quarter of fiscal 2024, $2.2 million more than the same quarter in 2023.
The forestry company had a $5.7 loss in the second quarter of 2024.
Part of the equation was that on August 19, the U.S. Department of Commerce increased countervailing and anti-dumping duty rates significantly, from 8.59 to 14.4 percent.
Third quarter lumber production year over year was similar, with 127 million board feet this year from 126 million in 2023, while lumber shipments registered 138 million board feet, which was 130 million board feet the year before. The average selling price was very slightly lower at $1,378 per mfbm, as it was $1,388 in 2023. The average log sales price in BC was $113 per cubic metre, down from $118 in 2023.
The company’ priority remains maintaining a strong balance sheet and financial flexibility, as WFP ended the quarter with liquidity of $137.3 million and a net debt to capitalization ratio of 13%. The 2024 capital expenditure spending is anticipated to be approximately $35 million.
Also, the company reported that their new Saltair continuous kiln on Vancouver Island continues to perform well and surpass its operating uptime and production performance targets. The continuous dry kiln has supported the company’s production of higher value products, given ongoing kiln drying capacity constraints on the BC Coast, and has operated at 98.8% of full capacity utilization since commissioning in April 2024. It has produced 25 million board feet of higher value kiln-dried lumber.
WFP continues to advance pre-engineering and permitting related to two previously announced continuous dry kilns, which has included kiln vendor selection and obtaining a draft modified air discharge permit at their Duke Point facility.
As previously announced, WFP plans to reduce lumber production in its BC sawmills by approximately 30 million board feet in the fourth quarter, following reductions of approximately 30 million board feet during the third quarter.
WFP issued a statement that “Demand and prices for Cedar timber and premium appearance products are expected to remain stable as buyers begin to build inventories for the spring season. Demand for decking products has started to seasonally slow.
“Most US distribution and dealer customers are generally more cautious as we head towards year-end. Repair and renovation spending is expected to improve gradually in 2025 but remain below peak levels experienced over the last few years.
“In Japan, continued softness in wooden home starts, well stocked inventories and a weaker Japanese yen to USD exchange rate are anticipated to impact lumber demand and prices in Japan into the first half of 2025.”
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